COMPANY NEWS

The Impact of the Carbon Tax on Coates Hire

Australia is introducing a price on carbon, which will start on 1 July 2012. The carbon price will start at a fixed price of $23 a tonne in 2012-13, and transition to a flexible market price under a cap and trade emissions trading scheme in 2015-16.

Liable entities, the high carbon emitters, will have to pay tax for every tonne of carbon pollution or the equivalent amount of certain other greenhouse gas that they emit. The intention is that the price on carbon pollution will create incentives to reduce emissions and invest in clean energy.

The Impact on Coates Hire

There is widespread speculation about the possible economic impact of a carbon price in Australia. At this stage there will be no direct impact for Coates Hire as we are not liable to pay the tax.

However, Coates Hire will be impacted by significant indirect effects over time. It is generally accepted that there is the potential for electricity costs to increase by about 30% over the next two years. Similarly it is anticipated that the costs of water will increase by at least 20% over the same period.